Use the template below to prepare the Cash Budget. Q2 Q3 Q4 Cash Budget 2021 Beg Cash Collections Disbursements: DM Q1 $5,909 $420,000 ($19,653) ($64,000) DL Total OH Costs VSGA FSGA Capital Purchases Interest Expense Tax Expense Change to Cash Balance Trfd (To)/From Savings Loans borrowed (repaid) ($6,387) $2,000 $24,000 $310,000 ($67,000) ($248,000) Ending Cash $41,647 $52,427 $74,968 $5,170 Debit Credit 200,001 2,400,000 200,000 Italic ASSETS: Cash Savings Account Accounts Receivable Inventory Fixed Assets Mfg. Fixed Assets SG&A Accum Depreciation Mfg. Accum Depreciation - SG&A LIABILITIES: Accounts Payable Loans Payable Income Tax Payable (Benefit) OWNERS' EQUITY: Capital Stock Additional Paid in Capital Retained Earnings REVENUES: Sales EXPENSES: Cost of Goods Sold Selling, General & Administrative Interest Expense Income Tax Expense 300,000 2,500,000 Totals 2,800,000 2,800,000 During the 4th Quarter of 2020, the following entries were recorded in a general journal to be posted to the accounts: Credit Cash Accounts Receivable Sales Debit $210,000 $210,000 $420,000 $108,200 SG&A Exp Cash Accts Payable Accum Depn-SG&A $97,133 $6,067 $5,000 $412,436 Inventory Cash Accts Payable Accum Depn-Mfg COGS Inventory $304,958 $47,479 $60,000 $290,509 $290,509 $6,387 Income Tax Expense Income Tax Payable $6,387 $2,000 Savings Cash $2,000 Post the entries to produce the post-closing trial balance. (Note: the ending balance sheet for one year is the beginning balance sheet for the following year.) The above entries produced the following post-closing trial balance: Husky Co. Trial Balance Dec. 31 2020 Debit Credit 5,910 2,000 210,000 121,927 2,400,000 200,000 Cash Savings Account Accounts Receivable Inventory Fixed Assets-Mfg Fixed Assets-SG&A Accum Depreciation-Mfg Accum Depreciation-SG&A Accounts Payable Loans Payable Income Tax Payable (Benefit) Capital Stock Additional Paid in Capital Retained Earnings Totals 60,000 5,000 53,546 6,387 300,000 2,500,000 14,904 2,939,837 2,939,837 The budgeting process begins with a projection of sales. Management provides the following estimates for 2021 and the first two quarters of 2022: Projected Sales in Units at $60 Selling Price: 2021 7,000 8,000 12,000 16,000 2022 7,000 8,000 Q1 Q2 Q3 Q4 Prepare Budgets for Sales, Production, Direct Materials and Direct Labor for 2021, using the following information and templates: Annual Sales Budget Units Price Sales Q1 7,000 $60 $420,000 Q2 8,000 $60 $480,000 Q3 12,000 $60 $720,000 Q4 16,000 $60 $960,000 43,000 $60 $2,580,000 Production Budget Inputs: Beginning inventory Q1: 7,000 Units Desired ending inventory = 20% of the following quarter's sales Production Budget Annual Sales Ending Inv Req Units Beg Inv Req Production Q1 7,000 1,600 8,600 -1,400 7,200 Q2 8,000 2,400 10,400 -1,600 8,800 Q3 12,000 3,200 15,200 -2,400 12,800 Q4 16,000 1,400 17,400 -3,200 14,200 43,000 1,400 44,400 -1,400 43,000 Direct Materials Inputs: Each unit requires 2.3 pounds costing $1.45 per pound Annual Q1 7,200 43,000 2.3 DM Budget Units to Produce DM per unit Total pounds DM +End Inv -Beg Iny DM Required Cost per pound Total Cost of DM 16,560 4,048 -3,312 17,296 $1.45 $25,079 Q2 8,800 2.3 20,240 5,888 -4,048 22,080 $1.45 29,348 Q3 12,800 2.3 29,440 6,532 -5,888 30,084 $1.45 $42,688 Q4 14,200 2.3 32,660 3,312 -6,532 29,440 $1.45 $47,357 2.3 98,900 3,312 -3,312 98,900 $1.45 $124,729 Direct Labor Inputs: Each unit requires 45 minutes at a rate of $17 per hour DL Budget Q1 Q2 Q3 Q4 Annual Units Produced DLH per unit Total DLH required Labor Cost per Hr Total DL Cost 7,200 0.75 5,400 $17 $91,800 8,800 0.75 6,600 $17 $112,200 12,800 0.75 9,600 $17 $163,200 14,200 0.75 10,650 $17 $181,050 43,000 0.75 32,250 $17 $528,250 Prepare the Overhead Budget and the budget for Selling, General & Administrative Expenses using the following inputs and templates. Overhead Budget Inputs: Variable overhead: $0.40 per DLH Fixed overhead: $270,000 per quarter FOH applied on the basis of budgeted DLH Annual OH Budget VOH FOH Total Q1 $2,160 $270,000 $272,160 Q2 $2,640 $270,000 $272,640 Q3 Q4 $3,840 $4,260 $270,000 $270,000 $273,840 $274,260 $12,900 $1,080,000 $1,092,900 Selling General & Administrative Budget Inputs: Variable SG&A = $2.00 per unit + 1% Sales Fixed SG&A $90,000 per quarter SG&A Budget VSGA FSGA Total SGA Annual Q1 $18,200 $90,000 $108,200 Q2 $20,800 $90,000 $110,800 Q3 Q4 $31,200 $41,600 $90,000 $90,000 $121,200 $131,800 $111,800 $360,000 $471,800 Using the previous budgets developed, prepare a Budgeted Income Statement by Quarter for 2021 using the Income tax rate is 30% Husky Co. Budgeted Income Statement by Quarter For the Year Ended Dec 31, 2021 Sales Cost of Goods Sold Gross Profit SG&A Expenses Operating Profit Interest Expense Taxable Income Income Tax Net Income Q1 $420,000 -377,195 $42,805 ($108,200) ($65,395) $0 ($65,395) $0 $14,904 Q2 Q3 Q4 Annual $480,000 $720,000 $960,000 $2,580,000 -376,535 -449,745 -566,385 $ (1,769,860) $103,465 $270,255 $393,615 $810,140 ($110,800) ($121,200) -131,600 ($471,800) ($7,325) $149,055 $262,015 $338,340 $ (720) $ (10,020) $ (18,030) $ (28,770) ($8,055) $139,035 $243,985 $309,570 $0 ($41,711) ($73,195) ($114,906) $25,529 $63,535 $102,445 $194,664 Use the template below to prepare the Cash Budget. Q2 Q3 Q4 Cash Budget 2021 Beg Cash Collections Disbursements: DM Q1 $5,909 $420,000 ($19,653) ($64,000) DL Total OH Costs VSGA FSGA Capital Purchases Interest Expense Tax Expense Change to Cash Balance Trfd (To)/From Savings Loans borrowed (repaid) ($6,387) $2,000 $24,000 $310,000 ($67,000) ($248,000) Ending Cash $41,647 $52,427 $74,968 $5,170 Debit Credit 200,001 2,400,000 200,000 Italic ASSETS: Cash Savings Account Accounts Receivable Inventory Fixed Assets Mfg. Fixed Assets SG&A Accum Depreciation Mfg. Accum Depreciation - SG&A LIABILITIES: Accounts Payable Loans Payable Income Tax Payable (Benefit) OWNERS' EQUITY: Capital Stock Additional Paid in Capital Retained Earnings REVENUES: Sales EXPENSES: Cost of Goods Sold Selling, General & Administrative Interest Expense Income Tax Expense 300,000 2,500,000 Totals 2,800,000 2,800,000 During the 4th Quarter of 2020, the following entries were recorded in a general journal to be posted to the accounts: Credit Cash Accounts Receivable Sales Debit $210,000 $210,000 $420,000 $108,200 SG&A Exp Cash Accts Payable Accum Depn-SG&A $97,133 $6,067 $5,000 $412,436 Inventory Cash Accts Payable Accum Depn-Mfg COGS Inventory $304,958 $47,479 $60,000 $290,509 $290,509 $6,387 Income Tax Expense Income Tax Payable $6,387 $2,000 Savings Cash $2,000 Post the entries to produce the post-closing trial balance. (Note: the ending balance sheet for one year is the beginning balance sheet for the following year.) The above entries produced the following post-closing trial balance: Husky Co. Trial Balance Dec. 31 2020 Debit Credit 5,910 2,000 210,000 121,927 2,400,000 200,000 Cash Savings Account Accounts Receivable Inventory Fixed Assets-Mfg Fixed Assets-SG&A Accum Depreciation-Mfg Accum Depreciation-SG&A Accounts Payable Loans Payable Income Tax Payable (Benefit) Capital Stock Additional Paid in Capital Retained Earnings Totals 60,000 5,000 53,546 6,387 300,000 2,500,000 14,904 2,939,837 2,939,837 The budgeting process begins with a projection of sales. Management provides the following estimates for 2021 and the first two quarters of 2022: Projected Sales in Units at $60 Selling Price: 2021 7,000 8,000 12,000 16,000 2022 7,000 8,000 Q1 Q2 Q3 Q4 Prepare Budgets for Sales, Production, Direct Materials and Direct Labor for 2021, using the following information and templates: Annual Sales Budget Units Price Sales Q1 7,000 $60 $420,000 Q2 8,000 $60 $480,000 Q3 12,000 $60 $720,000 Q4 16,000 $60 $960,000 43,000 $60 $2,580,000 Production Budget Inputs: Beginning inventory Q1: 7,000 Units Desired ending inventory = 20% of the following quarter's sales Production Budget Annual Sales Ending Inv Req Units Beg Inv Req Production Q1 7,000 1,600 8,600 -1,400 7,200 Q2 8,000 2,400 10,400 -1,600 8,800 Q3 12,000 3,200 15,200 -2,400 12,800 Q4 16,000 1,400 17,400 -3,200 14,200 43,000 1,400 44,400 -1,400 43,000 Direct Materials Inputs: Each unit requires 2.3 pounds costing $1.45 per pound Annual Q1 7,200 43,000 2.3 DM Budget Units to Produce DM per unit Total pounds DM +End Inv -Beg Iny DM Required Cost per pound Total Cost of DM 16,560 4,048 -3,312 17,296 $1.45 $25,079 Q2 8,800 2.3 20,240 5,888 -4,048 22,080 $1.45 29,348 Q3 12,800 2.3 29,440 6,532 -5,888 30,084 $1.45 $42,688 Q4 14,200 2.3 32,660 3,312 -6,532 29,440 $1.45 $47,357 2.3 98,900 3,312 -3,312 98,900 $1.45 $124,729 Direct Labor Inputs: Each unit requires 45 minutes at a rate of $17 per hour DL Budget Q1 Q2 Q3 Q4 Annual Units Produced DLH per unit Total DLH required Labor Cost per Hr Total DL Cost 7,200 0.75 5,400 $17 $91,800 8,800 0.75 6,600 $17 $112,200 12,800 0.75 9,600 $17 $163,200 14,200 0.75 10,650 $17 $181,050 43,000 0.75 32,250 $17 $528,250 Prepare the Overhead Budget and the budget for Selling, General & Administrative Expenses using the following inputs and templates. Overhead Budget Inputs: Variable overhead: $0.40 per DLH Fixed overhead: $270,000 per quarter FOH applied on the basis of budgeted DLH Annual OH Budget VOH FOH Total Q1 $2,160 $270,000 $272,160 Q2 $2,640 $270,000 $272,640 Q3 Q4 $3,840 $4,260 $270,000 $270,000 $273,840 $274,260 $12,900 $1,080,000 $1,092,900 Selling General & Administrative Budget Inputs: Variable SG&A = $2.00 per unit + 1% Sales Fixed SG&A $90,000 per quarter SG&A Budget VSGA FSGA Total SGA Annual Q1 $18,200 $90,000 $108,200 Q2 $20,800 $90,000 $110,800 Q3 Q4 $31,200 $41,600 $90,000 $90,000 $121,200 $131,800 $111,800 $360,000 $471,800 Using the previous budgets developed, prepare a Budgeted Income Statement by Quarter for 2021 using the Income tax rate is 30% Husky Co. Budgeted Income Statement by Quarter For the Year Ended Dec 31, 2021 Sales Cost of Goods Sold Gross Profit SG&A Expenses Operating Profit Interest Expense Taxable Income Income Tax Net Income Q1 $420,000 -377,195 $42,805 ($108,200) ($65,395) $0 ($65,395) $0 $14,904 Q2 Q3 Q4 Annual $480,000 $720,000 $960,000 $2,580,000 -376,535 -449,745 -566,385 $ (1,769,860) $103,465 $270,255 $393,615 $810,140 ($110,800) ($121,200) -131,600 ($471,800) ($7,325) $149,055 $262,015 $338,340 $ (720) $ (10,020) $ (18,030) $ (28,770) ($8,055) $139,035 $243,985 $309,570 $0 ($41,711) ($73,195) ($114,906) $25,529 $63,535 $102,445 $194,664